Hapag-Lloyd Reports Positive Q1 Operating Result Despite "Sharp Increase" in Bunker Prices

Hapag-Lloyd says Q1 "was noticeably affected by ongoing bunker price increases." Image: Hapag-Lloyd

Hapag-Lloyd AG (Hapag-Lloyd) today, in its 1Q 2017 financials reported a positive operating result despite being hit by what is said was a sharp increase in bunker prices.

"The first-quarter result was noticeably affected by ongoing bunker price increases. At 313 USD/tonne, the average bunker price was clearly above the previous year's figure of 197 USD/tonne," stated Hapag-Lloyd, noting that this is the highest levels have been since June 2015.

The company says increased transport volume and exchange rate changes pushed revenue up by 10.4 percent to €2.13 billion ($2.33 billion), compared to €1.93 billion ($2.11 billion) during 2016's Q1.

EBITDA improved by 6.4 percent during the period, growing to €131.3 million ($143.45 million), compared to €123.4 million ($134.82 million) during the same period of the previous year, while EBIT remained relatively unchanged year-on-year at €3.5 million ($3.82 million), compared to €4.8 million ($5.24 million) in 2016's Q1.

The group reports a net result loss of €62.1 million (-$67.85 million), compared to a loss of €42.8 million (-$46.76 million) during the same quarter of 2016.

"Our activities in the first quarter focused on preparations for the merger with UASC and on the launch of our new alliance. The launch of the THE Alliance went well, and the merger with UASC will be closed shortly," said Rolf Habben Jansen, CEO of Hapag-Lloyd.

"After the closing our priority will be to integrate UASC into Hapag-Lloyd quickly and to realise initial synergies from the merger."

In February, Hapag-Lloyd, in its report covering the company's 2016 Q4 and full year financial results, said lower bunker costs were a main driver behind the company's reduced transport costs, which declined by 12.3 percent in 2016, falling to €6.4 billion ($6.79 billion) from €7.3 billion ($7.75 billion) in 2015.